Airconditioning and commercial refrigeration major, Blue Star has announced collaboration with the leader in health and hygiene, Eureka Forbes to launch a range of Blue Star storage water coolers with in-built Aquaguard water purifiers.

Blue Star is a leader in the water cooling segment, with over seven decades of experience in providing expert cooling solutions. Eureka Forbes, operational for over 30 years, is one of the most formidable players in the water purification segment with its flagship water purifier brand, Aquaguard, which has been conferred with numerous awards for its superior technology. Both Blue Star and Eureka Forbes thought it prudent to leverage the core expertise in their respective arenas, into an integrated, comprehensive solution that provides chilled and purified drinking water which is 100% safe.

The market for pure drinking water has been on the rise with enhanced awareness about water-borne illnesses and the need for safe drinking water. Most water cooler customers have been combining the water cooler with an external water purification system to provide pure water. However, this solution has limitations, compromising the safety of water. The new integrated offering being launched comes from the stable of two experts – Blue Star and Eureka Forbes, which will reassure the customer as well as consumers of water that the water is absolutely pure, apart from chilled

The market for storage water coolers with in-built purification is in its nascent stage and is estimated at a total of 11,000 units in FY15 translating to a value of Rs 90 crores. The market is expected to grow with more and more consumers shifting to in-built purification to around 30,000 units in FY18 with a total expected market value of about Rs 300 crores.

While this product category may witness enhanced competition, it is not imported into India, as this requires significant investments and an established sales-and-service network, deterring most large multinational companies from exploring the market. On the other hand, a few unorganised regional manufacturers and assemblers have begun selling the integrated product of water cooler with in-built purification, but these lack the after-sales service network as well as the brand image since end-consumers may be apprehensive about the purity of the water offered by these products. Thus, the combination of Blue Star and Eureka Forbes, given their strong brand equity and wide sales and service infrastructure, is likely to be a differentiator in this fast-growing segment.

Product Range

The new line-up of storage water cooler with inbuilt purifier comprises four models - three models with UV purification and one model with RO purification technology. UV purification is preferred in markets with low TDS (total dissolved salts), while RO purification is ideal for high-TDS water markets in order to remove the salty component of water. This product range ensures absolutely pure water with an advanced 3-stage purification system in the case of UV treatment and a sophisticated 7-stage purification system in the RO treatment model. This purification system completely eliminates the need for bottled or packaged drinking water.

This product range is uniquely positioned to cater to educational institutes, hostels, canteens, commercial establishments, factories, hotels and the hospitality industry, amongst others. Increased awareness about water purity as well as chilled water demand during the summer season are expected to drive growth for this product range.

Distribution

With regard to Blue Star's distribution, this range will be available in select locations spread across the length and breadth of the country via a network of exclusive and multi-brand sales-and-service commercial refrigeration dealers. The Company has also built up a strong installation and service franchise network to support the dealers. The expansion of the Company's presence in Tier 3, 4 and 5 markets has contributed immensely to its water cooler growth and around 50% of the Company's sales are from smaller towns since consumers in these markets are aspirational and prefer premium brands.

Targeted Growth for 2015

Speaking to the Press at a conference held at Chennai, B Thiagarajan, Executive Director & President – AC&R Products Business, Blue Star states, "Blue Star is perceived to be a premium and aspirational brand and a strong contender in the consideration set of the discerning consumer, many of whom have instilled faith in our offerings. In addition, Blue Star continues to be a strong player in the corporate and commercial segment which comprises a significant portion of the overall market size of water coolers. We are really pleased about finding a perfect partner for this product and engaging with Eureka Forbes, who enjoy tremendous respect in the purification segment. Considering the above, while the market for storage water cooler with in-built purification is expected to grow by 15% in 2015, we are confident of outperforming the market to grow at 25% in this category."

Speaking about the collaboration, A V Suresh, President – International Operations, CEO – Forbes Professional, Eureka Forbes adds, "We are truly glad of our association with Blue Star as it has led to the introduction of a strong brand in this category that can be trusted by consumers. We want to continue to build concepts which people think they don't need or are unaware of. Over the years we have diversified our product portfolio even further to meet consumer needs and will continue to do so."